Car workers' union ratify a new Ford deal without strike

BLOOMBERG

Ford Motor Co employees represented by the Canadian Auto Workers (CAW) union ratified a new three-year contract that cuts about 1,100 jobs, while calling on the automaker to invest in some Canadian plants.

The vote was 95 percent in favor, the Toronto-based union said in a statement. The CAW now is negotiating with DaimlerChrysler AG's Chrysler unit, with a strike deadline of 11:59pm today. The union plans to use the Ford contract as a pattern for agreements with Chrysler and General Motors Corp.

Ford, the second-largest US automaker, and the CAW reached an accord on Sept. 12 that calls for closing a Windsor, Ontario, casting plant. A Windsor engine factory will remain open, and Ford will invest C$200 million (US$168 million) at a St. Thomas, Ontario, car plant. Wages will rise just 1.4 percent in the first year and 0.9 percent annually in the remaining years.

Ford will phase out production of V-6 engines at the Windsor plant, and the company has told the union a new model will be produced there starting in 2007, CAW spokesman Jim Pare said in a telephone interview.

The company is cutting jobs in North America after its auto business in the region posted losses in three of the past four quarters. Chief executive William Clay Ford is preparing his second restructuring plan in three years for the Dearborn, Michigan-based automaker, whose shares have declined 32 percent this year.

Union president Buzz Hargrove predicted in an interview last week that members would approve the new agreement. The CAW represents 12,460 Ford employees in Canada.

"We had to negotiate solutions to some very tough problems for Ford," Hargrove said in the statement.

The contract had no signing bonus, unlike previous agreements, and no increase in paid days off. Hargrove said on Sept. 13 that "we have wage increases, although they're not our usual wage increases. They're modest in nature." Ratification of the agreement, will better position Ford to meet the "challenges ahead," said Joe Hinrichs, president and chief executive officer of Ford of Canada.

"The reductions were a necessary decision to maintain our competitive foothold in Canada," he said in an e-mailed statement.

The contract contains incentives to encourage workers to retire, opening spots for younger employees. Hargrove said the investment at St. Thomas, where Ford makes Crown Victoria and Mercury Grand Marquis cars, will "put a face lift on the vehicles to make them more attractive." The union said "intense negotiations" continue with DaimlerChrysler, where the union faces demands that Hargrove estimate will cost 2,500 jobs, or 22 percent of the 11,440 Chrysler employees it represents.

Auburn Hills, Michigan-based Chrysler wants to close a Toronto casting plant and hire contractors to do work now performed by CAW members at Ontario plants in Brampton and Windsor. The Brampton plant makes the 300 sedan and the Windsor factory produces minivans.

Hargrove said on Sept. 14 there is "no way to avoid a strike" unless the company relents.